Loss of dependency is determined at the accident date; subsequent changes in dependants are immaterial.

The deceased, Nahinder Kumar Sharma, died in a motor accident on 25 December 2010 involving truck bearing registration no. HR-56D-0317.

The MACT, Rohini, awarded compensation of ₹47,28,000 with interest at 9% per annum by award dated 19 December 2017.

At the time of the accident, the deceased was 25 years and 6 months old, employed as a Constable in the Sikkim Police, and earning a monthly salary of ₹19,333, as reflected in his original salary slip.

The deceased’s mother died during the pendency of the MACT proceedings and his wife subsequently remarried; the surviving claimants were his father and minor son.

Whether the deduction towards the deceased’s personal and living expenses should be one-fourth or one-third, considering the dependants existing at the time of the accident and subsequent changes in their circumstances?

Whether the multiplier applicable to a deceased aged 25 years and 6 months should be 18?

Whether allowances forming part of the deceased’s salary should be included while determining the income and loss of dependency?

Whether the rate of interest awarded by the Tribunal at 9% per annum was appropriate?

Whether compensation for loss of consortium was payable to the surviving claimants?

The Court applied the principles governing computation of compensation under the Motor Vehicles Act, 1988, including the deduction for personal expenses and selection of multiplier.

Relying on Kirti v. Oriental Insurance Co. Ltd., (2021) 2 SCC 166, it held that the rights and liabilities crystallise on the date of the accident and that subsequent death or change in the status of a dependant should ordinarily not alter the compensation.

It also relied on Iffco Tokio General Insurance Co. Ltd. v. Anil Kumar Kaushik, 2026:DHC:2695, applying the same principle to a dependant mother who died during the proceedings.

Meenakshi v. Oriental Insurance Co. Ltd., 2024 SCC OnLine SC 1872, and E. Neeta Devi v. Ashwani Kumar, 2026:DHC:5184, establish that employment-related allowances and perquisites, including HRA, flexible benefit plans, provident fund contributions and other family-beneficial components, are to be included unless they are personal in nature.

The Court applied Pranay Sethi v. National Insurance Co. Ltd., (2017) 16 SCC 680, for future prospects and conventional heads, including consortium.

On interest, it relied on Kaushnuma Begum v. New India Assurance Co. Ltd., (2001) 2 SCC 9, under which fixed-deposit rates of nationalised banks provide guidance for determining interest under Section 171 of the Motor Vehicles Act.

The Court held that the deduction of one-fourth was correctly applied because the relevant family circumstances had to be assessed as they existed on the date of the accident; the subsequent death of the deceased’s mother and remarriage of his wife could not retrospectively reduce the claimants’ crystallised legal entitlement.

Since the deceased had completed 25 years but had not completed 26 years, multiplier 18 was held applicable.

The monthly salary of ₹19,333 was accepted on the basis of the original salary slip, and the Court rejected the Insurance Company’s objection to including salary allowances, observing that allowances forming part of employment income and benefiting the family must be included unless personal in character.

The Court reduced the interest rate from 9% to 8% per annum, having regard to the fixed-deposit rates prevailing when the claim petition was instituted in 2011.

Since consortium had not been awarded by the Tribunal, ₹80,000 was added for the two claimants at ₹40,000 each.

It reduced the interest rate from 9% to 8% per annum and enhanced the compensation by ₹80,000 towards loss of consortium.

The total compensation was revised from ₹47,28,000 to ₹48,08,000, comprising ₹46,97,838 for loss of dependency, ₹80,000 for consortium, ₹15,000 for loss of estate and ₹15,000 towards funeral expenses.

The Insurance Company was directed to deposit the enhanced compensation with interest at 8% per annum from the date of filing of the claim petition within four weeks, for release to the claimants.

Interest on the original compensation was also to be recalculated at 8%, with the balance released to the claimants and any excess refunded to the Insurance Company.

The appeal was accordingly disposed of.